Memo
To:
From:
Date:
Subject:
improvement
Christopher Thacker, Managing Partner of Towson Cornerstone Group, LLC
Brittany Wilson
8/01/2013
Sony's financial position compared to that of its competitor Samsung, needs
This report memo is provided to reflect on the financial position of Sony and its competitor
Samsung. Based on the criteria of stock price, net income, earnings per share, quick ratio and P/E
ratio Sony is not doing as well as its competitor Samsung. However, although Sony's financial
position is not as pleasant as Samsung, it is improving and has the opportunity to do a spin-off of
its entertainment division.
Samsung is one of Sony's leading competitors
To compare Sony's financial position I chose one of Sony's major competitors, Samsung.
My rationale for choosing Samsung was simply because Samsung overall performance has
significantly increased over the years. Sony can view Samsung as some type of motivation to get
past where Samsung currently stands financially. According to Yahoo finance Samsung is trading
at about $1,200 a share while Sony is only trading at $22.22 a share. There is a tremendous
difference in the stock price of Sony and Samsung, but that does not determine Sony's ability to
do better. Sony's stock price has increased 2 dollars from its stock price in June in which it was
trading at 20.30 a share (Yahoo Finance, 2013). The change in Sony's stock price in just in these
past two months is one indication of Sony's improvement.
Sony's financial position is not as strong as Samsung
To compare the performance, growth, and profitability of Sony and Samsung I used net income,
earnings per share, and the quick ratio. The table below gives a visual of the change both
companies have encountered over a 2 year span.
Table 1. Comparison of Financials
Year
EPS
Quick Ratio
Net Income
Sony
2011
-3.02
0.63
2013: 1.2 Mil
2012
-5.77
0.56
(4.1) Million
Samsung
2011
83.31
125.87
2013: 6.4 Bil
2012
143.80
148.13
4.4 Billion
Sony’s net income was in a huge deficit in 2012 and after the fiscal year ending in March of this
year was able to redeem itself and is now in the positive. That is Sony’s biggest indicator of
growth although it still does not exceed Samsung’s net income which is in the billions (Sony&
Samsung Financial Statements, 2013). Samsung is clearly the better competitor when you look at
the numbers its quick ratio is a lot higher, its EPS is positive while Sony’s has been in the red.
These numbers are important for measuring the profitability and growth of the two companies;
however it still does not mean that Sony wouldn’t benefit from a spin off entertainment division.
Although Sony is not in the best financial position compared to that of Samsung it still has a
chance to prevail over its competitors. Based on my findings from the analysis I conducted above,
and due to Sony's improvement, I recommend that we split off Sony's entertainment division.
If you have any questions or concerns involving this memo, please feel free to contact me at
bwilso22@students.towson.edu.
References
Samsung electronics co ltd. (2013, June, 12). Retrieved from
http://finance.yahoo.com/q;_ylt=An_ajW._AnsRvOBuTQbWM1jFgfME;_ylc=X1MDMjE0MjQ
3OD
k0OARfcgMyBGZyA3VzaDEtZmluYW5jZV91aDNfMDIEZnIyA3NhLWdwBGdwcmlkAwRu
X2dwcwM
xMgRvcmlnaW4DZmluYW5jZS55YWhvby5jb20EcG9zAzIEcHFzdHIDBHF1ZXJ5A1NTTkxG
LARzYW
MDMQRzYW8DMQ--?p=http://finance.yahoo.com/q?s=SSNLF&ql=0&type=2button&fr=ush1finance_uh3_02&uhb=uhb2&s=SSNLF
Samsung electronics annual report. (2013, August,8). Retrieved from
http://www.samsung.com/us/aboutsamsung/investor_relations/financial_information/downloads/2
013/SECAR2012_Eng_Final.pdf
Sony corporation sne. (2013, June 12). Retrieved from http://finance.yahoo.com/q/ks?s=SNE
Key Statistics
Sony corporation. (2013, June 12). Retrieved from http://ycharts.com/companies/SNE/chart
http://www.sony.net/SonyInfo/IR/investors/Meeting96/96_Consolidated_Financial_Statements.p
df
Sony consolidate financial statements. (2013, August 08). Retrieved
fromhttp://www.sony.net/SonyInfo/IR/investors/Meeting95/95_Consolidated_Financial_Stateme
nts.pdf
Sony electronics co ltd. (2013, June 12). Retrieved from http://finance.yahoo.com/q/ks?s=SNE
Key Statistics
Sony corporation sne. (2013, June 12). Retrieved from http://finance.yahoo.com/q/ks?s=SNE
Key Statistics